Thanks Timan and Dazzla who posted this in the BPN on the forums. It seems the .Mac strategy that Apple has implented will cost money. From the site:

Q: Is it true that Apple will begin charging customers for iTools memberships?

On Wednesday, July 17, 2002, Apple notified its customers that iTools will be replaced by a new membership service called .Mac. The membership includes brand new features, like Backup and Virex anti-virus software, and improved versions of the iTools services, like additional email and iDisk storage. The fee is US$99.95 per year, and as a thank you for being loyal customers, existing iTools members can reserve a first year special offer of $49.95. iTools members will have until September 30 to join .Mac. After this time, original iTools accounts will be deactivated.

also they have lightened the blow somewhat for existing iTools members:

Q: Will current iTools members be given a discount?

Yes. Current iTools members can purchase a one-year .Mac membership for US$49.95. (If purchased within the 60-day grace period). Normal charges (US$99.95) will apply after the first year.

Customers who have already paid for an upgrade to their existing iTools account (for additional storage) will receive the first year of their .Mac membership at no charge. Normal charges (US$99.95) will apply after the first year.